Many thanks to Danielle Kelley, Esq. for appearing on last night’s members’ teleconference. I forgot to give the number out for the firm: 850-765-1236
Just to cap it off, here is her Post from yesterday at Danielle Kelley Blog:
Danielle Kelley, Esq.
The propaganda from the banks has been far-reaching. Even if they devised a scheme to fraudulently throw away a homeowner’s hope at a modification, they are still pursuing the “deadbeat” homeowner argument. The essence is that the homeowner was not paying, so it doesn’t matter what happened after the homeowner defaulted.
That “deadbeat” argument is a myth. Whenever I interview a client, I am careful not to lead them. I simply ask the question, “What caused you to go into default?”. Nine times out of ten I will hear, “The bank said I had to be so many months behind to help me.” Or in the alternative, “My payments kept increasing and I didn’t know why. I called the bank to ask and they told me that unless I was behind in payments they couldn’t help.” After that the homeowner is left at the mercy of bank who is pretending to consider them for a modification, but yet fraudulently thwarting that process.
The first answer is the “stop payment” answer, which I have discussed in a previous blog. The second answer is now what I call the “bait and switch” on escrow accounts. Homeowners who pay monthly to the bank, unless agreed otherwise, expect the bank to take part of that payment and pay the taxes and insurance on the property with it. If the bank does not, the escrow account goes into the negative and the homeowner has to make up the difference in the payment. It is called an “escrow shortage”. And no one is immune, not even those who pay every month, on time, and would not dare to consider themselves as people who would fall into foreclosure.
I have seen it time and again. In one case, BOA inflated the escrow account $12,000 which resulted in a payment of $900 more per month. That very case would become my own, with my father on our Note. When he called to ask “why” the payments were going up he was given the script “To get that $900 off you need help. We can’t help you because you are current on your payments. You need to show us you need our help by making a partial payment.” Later when the partial payment was not applied, BOA stated that to be considered for a modification we had to stop paying altogether. Left with four years of modification attempts in bad faith, we were requested by BOA (in order to keep the modification file open) to record a quit claim deed to myself and my husband which came with a high price for documentary stamps. We were told to submit letters to the bank, and then told we could not mention the “stop payment” language in them. The letters had to be all about how we were suffering a “hardship” with no blame pointed towards the bank. The reasoning? They had to get Freddie Mac, the loan “owner”, to approve a modification, and Freddie wouldn’t dare approve a modification if BOA had done something wrong. To this day, BOA wants to pursue a foreclosure, yet they have absolutely no explanation for what inflated the escrow account to begin with.
In another case, unrelated to me, other than my representation of my client, the bank stopped paying the insurance in full. The homeowner had no idea that the insurance policy had lapsed until a year later when they were asked to make up for an escrow deficiency. At a payment climbing hundreds of dollars more than they ever agreed to pay, when they had been making their payments in full and counting on the bank, per the mortgage contract, to pay the insurance, they were now faced with payments they should have never been liable for. They were not a “deadbeat”. They were paying in full all along.
Then the truth is brought to light, and the deadbeat argument fails because we learn that no one, not one person, is immune from this. If a homeowner is making monthly payments and depending on a bank to pay the taxes and insurance, they are at the mercy of the bank. And often to a bank like BOA who is seeking to foreclose loans to get them off of their books, as their own employee declarations filed in the HAMP case in Massachusetts show us.
They have no incentive not to deliberately inflate a homeowner’s escrow account and cause the payment to rise to the point where the homeowner calls them and eventually ends up in default. Their own employees have stated that they profit from foreclosures over modifications.
So before the argument is bought that the homeowner in foreclosure is a “deadbeat”, know this much, the bank can cause you to become a “deadbeat” too, even if every payment is made in full and right on time.
Filed under: CDO, Eviction, foreclosure, GARFIELD GWALTNEY KELLEY AND WHITE, GTC | Honor, Investor, Mortgage, securities fraud Tagged: | "Stop Payment" Instruction by Bank, Bank of America, Danielle Kelley, deadbeat, Freddie Mac, HAMP, LOAN MODIFICATION